In November 1995 I had a job selling ad space for tech magazines. One afternoon the office fax machine scrolled out 12 pages worth of insertion orders from a software company I’d been pitching for two months, and I did a happy-dance in my cubicle. With those orders, the company had committed to running a full-page ad in every issue the magazine would publish in all of 1996. I called the client to confirm the mailing address for our traffic coordinator and the creative instructions — right-reading film, emulsion-side-down — and got the further good news that the ad creative was already on its way in a FedEx pouch. The ad creative. A single photo with ad copy that would serve as the campaign’s creative all year.

I don’t miss the inky mess I’d make of my hands when I had to change the cartridge on that fax machine. But they sure were simpler times in the world of advertising and publishing.

Back then the brands on the other end of those fax machines could afford to sink significant time and resources into the production of each creative unit. Hiring a renowned photographer, a model, a team of set designers, makeup artists, art directors and post-production editors might set them back $25,000 for a single photo for a single print ad. But given the enormous role played by that one photograph — it would likely anchor a $15-million national ad campaign across many magazines for months — the time and dollars invested in getting it exactly right could fairly be called a rounding error. Twenty-five thousand dollars in creative development divided by 15 million in media spend is less than two-tenths of a percentage point.

While the math still works for brands advertising in glossy fashion magazines, there is trouble in paradise. Or rather, paradise has moved to the Internet. If brands want to engage with consumers online (which, more and more, is where their consumers spend time) they need to compete with publishers and social media sites that refresh their bins of eye-candy every few minutes. By the time they’ve art directed, developed and shipped a piece of right-reading, emulsion-side-down film to a publisher, Gangnam Style has been replaced with parody videos of Gangnam Style.

The digital landscape changes fast, and pictures are a main catalyst. Netscape released the first commercially-available web browser in 1994 and fewer than 15 years later Flickr housed more than 6 billion photos — more than 450 times the number of photos held by the Library of Congress. In 2009 more than 2.5 billion camera-enabled devices were in the hands of would-be photogs and in the course of a year would go on to take ten percent of all photos ever taken by humans. Instagram, the photo-sharing apps for smartphones that Facebook bought earlier this year for $1 billion, measures its customer engagement in uploads-per-second; 60 uploads per second, back in the quaint old days of December 2011, pre-acquisition, and before comScore released data showing Instagram’s daily usage is now greater than Twitter’s. By early 2012 Facebook members were uploading to the site more than 300 million photos every single day.

This slurry of data signals “the end of the Kodak Era, where we took photos birthdays and vacations, and shared them only with a small group of friends,” says Bob Lisbonne, CEO of Luminate (my boss) and former SVP for Netscape’s browser group in 1990s. “We’ve now entered a phase in which visual communication is supplanting the written word — what some are calling the dawn of the Imagesphere.”

But it’s not taking or uploading pictures that should worry marketers. It’s the fact that there are consumers on the other end of these photos — viewing them, engaging with them, and generally spending more time with images they see on Facebook, Tumblr or Pinterest than they used to spend reading glossy magazines that arrived on the newsstand once a month. comScore’s Mobile Metrix 2.0 survey says Facebook users are spending more than seven hours per month visiting the site by way of mobile phones alone. Om Malik, founder and editor in chief of GigaOM, asserts that photos are the fuel driving the mass migration to social media:

Malik writes, “Photos are the reason many of us continue to engage with Facebook. Facebook has tried many verbs to increase and maintain our engagement with the service — read, listen, watch. But in the end, it’s the photos that work wonders for the Menlo Park, Calif.-based social-networking giant.”

Research from a team at Harvard Business School supports Malik’s claim. A 2009 study finds that 70% of all activity inside social networks revolves around photos. Keep in mind, that was in 2009 — when Facebookers were uploading a mere 31 million photos a day, and My Space was still relevant enough to be included in a study of social-media sites.

These millions of new photos — or at least those shared by friends and organizations we choose to follow — are pushed to us each day in an unending, ever-updating stream of visual storytelling. We watch our friends’ kids grow up, in near real-time, and news stories unfold throughout the day as fresh photos replace those from hours or minutes before. Publishers, too, are responding to their readers’ growing appetite for image content with larger, high-res photography and the gallery-ification of stories as disparate as celebrity news, travel destinations and business analysis.

Roughly one-third of pixel real estate on the web is image content, according to the Wall Street Journal, and those images get old fast. In its first three days on the Internet, the average photo has attracted half the total views it will ever attract. If you look at content shared via social media platforms rather than the entire web, the half-life for content is measured in hours not days.

And there lies the rub for brands. The changing dynamic of media consumption has changed the rules of marketing in three fundamental respects.

One: “Professional grade” doesn’t get the mileage it once did.

Sure, the list of most-viewed clips on YouTube includes Justin Beiber music videos, but it also includes quirky independent interviews of people waiting in line for iPhones and home-movie sensations such as ‘Charlie Bit My Finger… Again.’ The same goes for photos. Consumer interest no longer tracks with traditional definitions of “photo quality.”

There was a time when all media was professional media, created and distributed by large publishing companies. It only made sense, then, for advertisers to polish their creative units to a professional, high-production-value shine. Good advertising should always seek to imitate the editorial content around it; ‘native advertising’ has been around long before the Internet. There’s mounting evidence, however, that recall rates for TV spots and display ads in magazines are declining, despite the professional expertise that goes into their creation. Nowadays relevance trumps production value.

Now that amateur photographers have gained access to distribution — Google might lead you to an independent photoblog, Instagram might introduce you to some great photos from an excellent hobbyist — consumers are dividing the world of photos into ‘interesting’ and ‘not interesting,’ not ‘professional’ and ‘amateur.’ Interesting no longer requires the talents of a professional.

Two: Attention Deficit Disorder has become a lifestyle choice.

A trend that’s probably as old as the publishing industry has achieved fever pitch: Content miniaturization. Articles get shorter and shorter, and readers still can’t get to the end of them. I mean, who has time to read the entire tweet anymore? Audience ratings seem to suggest that frequency and freshness of content are trumping quality and depth. In a world where tapping our thumbs on the Instagram icon on our iPhones unleashes an endless stream of photos taken in the last four hours, looking again at last month’s print ad for Prada strikes many modern consumers as boring.

Three: Consumption is giving way to interaction.

There’s something that’s even more popular than posting pictures: Liking them and commenting on them. It’s a sign that we define ourselves not only through our own pictures, but also through association with the pictures of others. It’s this instinct that explains the growth of Pinterest, the social network that rocketed to 10 million users faster than any social network before it. It’s not built on photo-sharing in the sense that Instagram or Facebook are (“Hey, check out my pictures”); it’s about photo-assembling (“I’ve collected these pictures so you understand who I am and what I care about”). Forty-one percent of us, says new research from Pew, find photos and videos online and re-post them on sites designed for sharing with others. It’s one of the most popular things we do on the Internet.

In order for brands to embrace these new platforms for photo mixing and mashing, they need to get comfortable with their images being separated from the carefully assembled context of yesterday’s print ad or the Spring catalog, and being extracted from the traditional models that protect ownership rights and pay out talent royalties. Your customers want to befriend you and play with you, but that game is going to be on their terms.

So what’s a brand to do?

The creative departments at traditional agencies simply can’t adapt to this new world, says John Battelle, founder of Federated Media (disclosure: I was his co-founder there) and the first managing editor of Wired Magazine. The old rhythm of branded storytelling — devise the Big Idea, take a month to convert it into an art piece of advertising, and then enlist the media department to implant it deep into the skulls of consumers through mass media — is losing its efficacy. Agencies will continue to find success producing professional-grade assets and distributing them around tent-pole events, but they’re ill-equipped for the in-between times, the 363 days a year that don’t feature the Super Bowl or the Oscars. The beefy muscles built up over years of pumping out thirty-second TV spots and full-page print ads aren’t well suited for the marathon running required by lasting social-media conversations. “Brands need to catch up to media,” he says, and they’re going to need some help.

“Most creative agencies don’t see themselves as ongoing, real time publishers — that’s the business of, well, publishers,” Battelle continued. “I predict the two will merge over time — agencies must become more like publishers, and publishers are going to have to learn how to service brands like agencies do.”

Federated Media says the solution is a distributed, crowdsourced model for branded content creation. It invites advertisers to tap the talents of “the world’s largest creative department,” the 30 million some-odd bloggers affiliated with FM, from the vast army of small WordPress publishers to large-reach sites such as Boing Boing or Notcot.

Three years ago, David Veneski, Intel’s director of US media, took FM up on the offer for a program called My Life Scoop. While the site features periodic updates on products like Intel-powered Ultrabooks, the bulk of the content is created by a broad array of independent content producers who speak the native language of Intel’s customers — those young, affluent people who seek out cutting-edge tech gadgets to enhance their lives. The imagery that accompanies the site’s content is not highly produced. Instead the emphasis is on fit, tone and relevance — photos and videos collected, curated and presented to My Life Scoop readers at a fraction of the cost associated with a professional shoots. The content is on-message (‘Sponsors of Tomorrow’ and ‘Ultrabook’), it’s frequently refreshed and it’s inviting social amplification. Nearly 50,000 Twitterers are following the My Life Scoop feed, and 100,000 Facebook members have Liked it.

“It’s important to us that we provide an authentic and compelling brand story for our target audience,” says Veneski. “We find that visuals and imagery, both photos and video, alongside written content, offers a way of telling a story that is more interesting to the people we want to reach.”

General Electric has taken an even more stripped-down approach. On Tumblr they’ve created (with help from the Barbarian Group) a corporate site that is nothing but photos. You’ll only find text only where it’s used to caption or hashtag a photo. What’s initially surprising is that airplane engines, smart LED bulb testing facilities, and gardens decked out with PulseArc Multi-Vapor metal halide lamps are quite photogenic, especially when they’ve been dolled up with an Instagram filter. Without set designers, models or professional photographers, GE is telling its story with frequent, low-cost iPhone pictures. More importantly, GE fans are spreading this story to their networks, with comments and hashtags included.

And the ‘interactivity’ isn’t just something that occurs after the brand unleashes the content — GE uses Twitter to invite its social-media followers to pick the locations of future photos.

Without breaking the bank or getting reckless with its brand, GE found a path to social-media relevance. The brand is leaning into the consumer acceptance of spontaneous, inexpensive photo storytelling, which isn’t just reducing production costs either. It’s giving GE a stream of highly sharable content nuggets to satisfy the short-attention-span types and the sharers.

In other words, they’re speaking our language — the one in which every missive is worth a thousand words.

In the Kodak Era we took pictures on birthdays and vacations. Now, with a camera in nearly everyone’s pocket — there were 2.5 billion camera phones in use in 2009 — there is a whole new dynamic around image content. You can break down this new dynamic into three phases.

Phase I
We’re witnessing a massive increase in photo creation: Ten percent of the photos every taken by humankind were taken in the past 12 months (source).

Phase II
New platforms for sharing those images (especially Facebook, Instagram and Tumblr) have turned photos into the universal language for communicating in social media.

Phase III
New technologies are turning those static images into interactive experiences. The popularity of Pinterest, from anonymity to the third largest social network in a few short months, is one example. Luminate’s image apps, which are used by more than 100 million consumers, are another.

From a presentation by Facebook’s Paul Adams at FM’s Signal SF event last week: A history of technological advances and the early missteps of the media creators who used them (via Business Insider). It’s about time someone called out the idiocy of using the printing press for printing books in LATIN!

The more important point, though, is that content creators respond to new media technologies slowly — early TV was like going to the theater, only the actors appeared inside a small box in your living room; the early web was like reading the newspaper without the inky residue on your fingertips. Advertisers tend to respond even more slowly. Web publishers are hustling to embrace the social, conversational expectations of digital audiences, while most of the ads that support them are still Flash banner that beg you to click them. But, hey, we eventually figured out television advertising — I have hope.

In his opening remarks FM’s @johnbattelle says mobile strategy is nothing if not paired with local, social and real-time strategies.

A few presentations later my boss, Luminate CEO Bob Lisbonne recommends you better start thinking about your image strategy too. I may be biased (hey, he signs my paychecks) but I think he’s on to something. Some stats he shared: 10% of the pictures ever taken were taken in the past 12 months (by my count this was the most tweeted/RT’d stat of the conference), roughly 40% of the pixel-space on the web is image content, and over in Facebook we’re uploading 70 billion photos a year. Yet images are still “black rectangles of pixels” to the search engines. According to a post on Google’s blog, among the ironies of computer science is:

We can write a computer program to beat the very best human chess players, but we can’t write a program to identify objects in a photo or understand a sentence with anywhere near the precision of even a child.

When you give users the opportunity to interact with images — let the mouse into an image to get relevant content or services — 20% are doing it.

Meanwhile Liz Ross at Mediabrands says the big cultural events, say Mad Men or Glee, are still created by TV. Digital can’t yet create media opportunities at scale.

Yet Old Spice launched its most recent campaign on YouTube. While the campaign’s creative began as a conventional TV spot — using YouTube as the launchpad was a practical decision, says P&G’s Charlie Chappell, since Old Spice couldn’t afford to run it on the Superbowl head-to-head with a rival product from Dove — it evolved into a social media phenonomenon. “I’m on a Horse” was followed by “Response,” where the handsome and funny star of the original spot created messages that directly addressed Twitter influencers and Twitter commoners, delivered via @Replies. The result: Within 3 days, 40 million people had watched various Old Spice videos on YouTube — that’s more people than watched Obama’s victory speech. P&G attributes a 27% boost in Old Spice sales to the campaign.

Before it was over, even Grover got into the act.

According to Vitrue’s Jenny Heinrich, though, digital advertising is still tremendous pain in the butt: The ease of buying TV means that trafficking and administration costs are 2% of the media investment. For digital it’s 26%. And digital isn’t just expensive on the front end, says Shopkick’s Cyriac Roeding, it’s still less efficient for retailers to point a customer to its online store (where conversion to sale ranges from sub 1% to low single digits) than to its physical location (nearly half the people who walk into a clothing or electronics store make a purchase).

Social media, though, is giving brands an opportunity to make friends for life with customers and new prospects, even as consumers are becoming less inclined to tune in to advertising. One of the first 10 accounts followed by a new Twitter user is a brand, says Manilla’s Jessica Insalaco. While nearly 80% Facebook members follow fewer than 10 brands, the fact that hundreds of millions of consumers are inviting brands into their newsfeeds at all is significant. We hate ads, but we’re willing to be friends with brands.

On Yahoo: Former head of sales at Yahoo Wenda Harris Millard says her old company has become obsessed with math (and chasing Google) and has lost touch with the art of the media business. Given that “many CEO candidates view Yahoo as a falling knife” they wouldn’t want to attempt to catch, Battelle asked Millard how they’re going to emerge from their funk. Pshaw, she said. Yahoo still has 680 million users, and plenty of senior execs love a challenge. “Look at me, I went to Martha Stewart when she got convicted.”

Earlier this month, in the lobby of Federated Media’s CM Summit, I chatted with Scribe Media about Pixazza, interactive images and startups.

“An increasing amount of content is being built around photos to enhance stories and increase engagement. Pixazza has looked through the eyes of consumers viewing your images and see they want more than just a limited, static experience. How much of an opportunity does this create for brand advertisers? Chas Edwards, CRO of Pixazza, states that 20% of those presented with interactive images engage with that additional content. He reports 100 million daily interactions by 150 million monthly uniques, with 100 publishers signing up daily for Pixazza.”

In the early days of Federated Media, we started new-prospect meetings with a chart that showed one line going up and to the right (“Internet usage is growing”) and another line going up more steeply (“usage of conversational media such as blogs and social networking sites is growing faster”).

Time to update that chart! The latest numbers from Comscore (the same source we used back in 2006) show that without Facebook, the Internet is actually shrinking.

Federated Media has teamed up with Clorox on a metablog for moms that pulls content from top womens and parenting sites such as Dooce, Rookie Moms, Girls Gone Child and Her Bad Mother. The site is powered by Foodbuzz, a curation platform (and community of 4000+ food bloggers) acquired by FM in 2010.

“Federated Media Publishing has launched the first of what it has dubbed ‘DailyBuzzes,’ or sites that will curate content around specific topics with a variety of brand partners. The first site, DailyBuzz Moms, will, not surprisingly, target moms (and some dads) in partnership with The Clorox Company.”

I love the idea of brands investing in marketing projects that also attempt to provide a consumer service. Many will fail, but I appreciate the effort to do something beyond an interruptive product pitch. So I’m rooting for Colorox and FM on this one, but they’ll face at least two obstacles on the road to a big and engaged audience. One, they aren’t the only curators in town. They’re up against hundreds of sites and services that also promise to filter and present a digestible sampling of the day’s best parenting content, including the bloggers they’ve partnered with. Two, they head into that battle — a battle for consumer attention — with a hand tied behind their back. Unlike an independent blogger or a new startup, Clorox has its brand to consider. Earlier this week, tech bloggers achieved record traffic by covering the Bin Laden story. Heather Armstrong at Dooce reached new audiences 2 years ago when her unhappy rant directed at Maytag went viral on Twitter. Will Clorox be open to republishing quality content, even if it’s sometimes controversial? I hope so.

At first blush, I’m a fan. If you like the idea of StumbleUpon, Digg or Twitter, but don’t have the time or patience for all that randomness, it’s a simple way to discover new voices around your favorite topics — in this case, Mom content. And tapping into an existing platform like Foodbuzz (both the technology and the humans) will give Clorox a leg up.

Disclosure: I was part of the founding team at FM and worked there from 2005 to 2009, and I continue to have a crush on the entire Armstrong family, who create Dooce.

Mazda teamed up with FM and FourSquare to create special badges for geo-location check-in-ers who visit certain types of establishments that Mazda wants associated with its kind of drivers — live music venues, hipster boutiques, fashion events, stylish watering holes, and in-person videogame competitions. One select winner will become mayor (for life) of his or her very own 2011 Mazda 2 subcompact hatchback.

“The Mazda team worked with FM and foursquare to find an alternative approach to reaching young urbanites and connect with them at music, social media and group events. Followers of MazdaUSA’s foursquare, Twitter and Facebook channels will also see special location announcements for places where they can unlock the Inner Driver badge and instantly advance through the other steps.”

Generally I like this idea a lot. It’s a big, national brand connecting with customers at a very local level, and connecting with them around activities — going to fun places and telling friends where to find them by way of FourSquare — that tech-savvy young people are doing with or without Mazda’s contest. So much smarter than the many sponsored contest that try to lure consumers into forced, unnatural behavior in exchange for expensive prizes.

Next time, though, I’d love to see if Mazda can pull it off without the giving away a free car. I mean it’s generous of them to pony up a $14,000 reward, and I’m sure the winner will be thrilled. But in some ways the pricey give-away might distract Mazda (and its fans) from the bigger idea. It’s not about the car or who wins it in early December. It’s about Mazda showing the cool kids that it understands what fun looks like to their generation.

The magic of FourSquare is the game itself: They don’t need to send you an actual gold crown for checking in to your favorite spot, it’s enough to see the digital one that tells you you’re mayor.

Great start, Mazda. Now find away to keep the fun alive for everyone who doesn’t win a car.

(Disclosures: I was part of the founding team at Federated Media and continue to root for its success. I’m also the mayor of Emmy’s Spaghetti Shack.)

In a few weeks, I’ll be joining the team at Pixazza as Chief Revenue Officer and Head of Publisher Development.

Which means I’m changing my role at Digg. While I’m handing off daily management responsibilities, I’ll stay on as a strategic advisor to Digg. In that capacity, I’ll be helping with Digg’s ad platform strategy.

Helping online content-creators make money lights a fire in me. Almost 6 years ago, John Battelle came to me with an idea that became Federated Media. We created a company that enables blog publishers to fund important stories and break news from outside the Big Media club.

One of FM’s first major sites was Digg. As Digg’s Publisher and Chief Revenue Officer in 2009 and 2010, I worked on a platform that is now poised to enable news sites to better monetize original stories.

When I started talking to Bob Lisbonne and Jim Everingham at Pixazza, I heard something that reminded me of my favorite parts of FM and Digg — evidence of an innovative model to sustain great digital content. Hundreds of thousands of websites are attracting audiences to photographs. But it’s hard for contextual ad-serving technologies to identify what’s inside an image. So advertisers haven’t spent big dollars against image content, and photo-heavy publishers, like bloggers in 2004 and 2005, struggle as a result. Pixazza’s got technology that takes on that problem. In my new role at Pixazza, my ultimate goal is to serve audiences by unlocking photo content as a revenue-driver, which helps both advertisers and publishers move their businesses forward.